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Swiss Stocks Fall as Fed Signals No Stimulus, Italy Yields Rise

Stocks in Switzerland (DAX) declined for the second time in three days after the U.S. Federal Reserve refrained from signaling more asset purchases and concern lingered the euro area’s debt crisis will deepen.

Nobel Biocare AG, the world’s second-biggest maker of dental implants, and Transocean Ltd. (RIG), the largest provider of offshore oil rigs, dropped more than 4 percent. Holcim Ltd. (HOLN) paced losses in a gauge of European construction companies.

The Swiss Market Index (SMI), a measure of the biggest and most actively traded companies, slid 0.7 percent to 5,719.09 at the close in Zurich. The broader Swiss Performance Index lost 1 percent today.

“The markets’ hopes for a possible new quantitative easing have been belied,” said John Plassard, director at Louis Capital Markets in Geneva. “Yesterday’s Fed meeting was a perfect copy-and-paste from the last meeting, where nothing was really announced. The good news is that the U.S. economy is growing, albeit at a moderate pace.”

The Fed last night refrained from taking measures to lower borrowing costs or announce a third tranche of quantitative easing, saying the U.S. economy continues to expand even as the global economy slows. The Fed warned that “strains in global financial markets continue to pose significant downside risks to the economic outlook.”

Italy Bond Sale

Italy sold 3 billion euros ($3.9 billion) of five-year bonds, the maximum target for the auction, and borrowing costs rose to the highest since 1997 as Parliament prepared to approve a 30 billion-euro emergency budget plan.

The Rome-based Treasury sold the debt to yield 6.47 percent, up from 6.29 percent at the last auction on Nov. 14. Demand was 1.42 times the amount on offer, compared with 1.47.

“Today’s bond auction clearly reflects the skepticism of investors,” said Plassard. “There is no real progress on the issue of the European debt crisis.”

French banks led losses in Europe on mounting concern the country may lose its top credit rating.

An index of investor and analyst expectations, which aims to predict economic developments six months in advance, fell to minus 72 from minus 64.3 in November, the ZEW Center for European Economic Research in Mannheim, Germany, and Zurich- based Credit Suisse Group AG said. A gauge of analysts’ assessment of the economic situation dropped to minus 20 from minus 4.8 in November.

Swiss investor confidence declined in December, adding to signs of a deepening economic slowdown as exporters are struggling with a currency that they say is too strong.

Nobel, Transocean

Nobel Biocare fell 4.8 percent to 10.47 Swiss francs after Bank of America Corp. cut the stock to “underperform” from “neutral.”

Transocean dropped 5.4 percent to 38.35 francs as crude oil fell the most since September in New York.

Holcim, the world’s second-biggest cement maker, declined 3.9 percent to 49.45 francs as a gauge of European construction companies was the third-worst performer of the 19 industry groups in the Stoxx Europe 600 Index. Geberit AG (GEBN), Europe’s largest maker of toilet-flushing systems, slipped 2.5 percent to 172.90 francs.

Cie. Financiere Richemont SA, the owner of the Cartier brand, dropped 3.4 percent to 45.74 francs.

Kudelski SA (KUD) slumped 11 percent to 9 francs, the biggest decline in more than three months. Joern Iffert, an analyst at UBS AG, removed his “short-term buy” recommendation on the world’s largest maker of security cards for pay television.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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